There comes a time in every startup’s life where it’s time to pick a CRM (Customer Relationship Management) tool. The 1000 item long Notion table you used is overflowing and it’s time to get a “real” CRM. For technical and product founders, we look for solutions with a good user experience, strong integrations and a pricing strategy that can be understood without a PhD in econometrics.
However, in the competitive landscape of CRM this is easier said than done. You may find a few choices that almost meet the criteria. But inevitably, someone will utter the phrase “We’re going to end up on Salesforce anyway.”
And they’re probably right.
In order to understand why Salesforce has established itself in such a strong position, it’s important to step back and consider what a CRM is and the critical role it plays in most software companies.
What is a CRM?
In its simplest form, a CRM is a place to store information about the companies and people that you do business with. It helps you navigate them through various business processes, which become increasingly more complex over time.
In the early days of a company, there is often a spreadsheet or Notion document that gives you a single place to get information about your customers and how your team is interacting with them.
When the company starts to grow, the demands of multiple team members communicating over more channels starts to add pressure to the simple solution and many teams will transition to a dedicated tool that can offer robust deal tracking for their sales pipeline and their current customers.
As your team grows more, it’s likely that you’ll want to start tracking leads earlier in the funnel so that marketing and sales can collaborate. Later still, you might hire a VP of Sales or Revenue Operations who wants to report on the data and set up more advanced automations that make your team more efficient and so on forever. This platform for revenue generation and reporting has collectively come to be known as a CRM.
Over time, the CRM industry has attempted to standardize on a set of core concepts which, at first glance, generalize well to most businesses. We’ll explore in the subsequent sections where this assumption breaks down, but for now let’s dive into the basics.
Companies
In order to label your product as a CRM, it’s a requirement to have a Company object. These objects are used to track a business entity and will often contain information such as the website, name and location of the business.
People
While tracking companies can be helpful, it’s almost always the case that you want to also track your relationship with the individuals at the company. This requires the introduction of a second object: People. This object can track contact information such as email addresses, phone numbers or social media handles, alongside other useful data such as their role within a company.
Accounts
In many cases, larger companies will have several different teams that you may work with independently. This often presents a hiccup to the carefully planned world of Companies and People so a “fudge factor” is introduced that is often called an “Account.”
This concept rarely maps to the way your team thinks about the concept it represents as every business is a little bit different. Amongst our customers at Attio, we have seen a broad array of examples ranging from “Hiring Team” to “Business Unit”. In every case, the term “Account” would rarely be used, but the abstraction can still be made to work with some extra effort.
Opportunities
Finally, we need somewhere to keep track of the money. Opportunities (also known as “Deals”) allow you to keep track of the actual sales motion to drive a Company or Person through your process. A Deal will almost always be connected to a Company and a Person, and in many cases an Account. Deals typically have a status to represent their progress through the pipeline, as well as a variety of operational data such as close probability, deal size and the team member responsible for the process.
What’s critical about all of these objects is that the value of a CRM is largely derived from the platform's understanding of the data and the automation and reporting capabilities that are unlocked from that understanding. This “schema” (or data model) allows CRMs to optimize their user experience and more easily provide initial value, but it comes at the cost of extensibility.
When the cookie cutter is the wrong shape
This data model often works quite well to start but, fairly quickly, you will always find yourself translating the way you think about your process into the setup your CRM of choice proposes. Eventually, a situation will arise where no matter how hard you try, you simply cannot fit what you want to achieve into the narrow world defined by these standard objects. Perhaps you are building a marketplace that also wants to track Listings, an online car dealership that wants to track Vehicles or an Infrastructure as a Service business that wants to track APIs and there will simply be no way to model it.
A common solution that most CRMs take is to introduce “Custom Fields.” A custom field is a way for users to store specific information unique to their business needs in addition to the standard fields provided by the platform. On many platforms, these are quite literally unformatted text, although some more advanced products may allow you to add minor validation to them. Because the CRM does not know what this field represents to your business, it’s obviously quite challenging to position it within the UI, to make reasonable searches or provide insightful reports for it.
This lack of flexibility and context has been a critical weakness in every CRM, except for Salesforce.
The magic of the Custom Objects
This ultimately brings us to one of the foundational reasons as to why Salesforce has become so ubiquitous. Eventually, all companies need to tweak their sales process to match the way they sell. It’s the Product Market Fit equivalent for a sales team. Businesses are all a little bit differently shaped and so it is an inevitable end state that they will need to go beyond the basic concepts.
This is where the most elusive of CRM concepts appear - the Custom Object.
This magical concept allows you to configure the objects they need alongside the predefined concepts identified above. The object can be anything you want. There are only a few CRMs that attempt to support the custom object: foremost Salesforce and Hubspot, but only Salesforce truly delivers on the underlying promise of a flexible data model.
The unique brilliance of Salesforce is that using a Custom Object, a team can accurately represent their unique business process within the platform. Additionally, third party developers from Salesforce’s enormous ecosystem can dynamically create these objects for you - allowing you to have first party representations from tools like Stripe, Intercom or DocuSign directly in your instance.
Many Salesforce instances will have hundreds of these objects ranging from Workspaces to PaymentGateways all in service of representing the full relationship between the business and their customers. This solution cleverly circumvents many of the problems that result from not having context by replacing them with deep configuration.
Salesforce and the CRM complexity tax
If you use Salesforce, or know someone who does, you will probably have heard them complain about it. This isn't because Salesforce is necessarily bad software, but it's definitely not easy to use. It's powerful, and as we discussed above, has often been the only solution that can accurately model the unique sales process of a business.
For the most part complaints about Salesforce fall into one of three categories and as we will see share a similar root cause:
1. “Salesforce no longer matches the way we work“
It’s expensive and time consuming to make any changes to a data model once it’s set up in Salesforce. This often means that a process evolves internally but the CRM is not updated to match. “Dead” or “Unused” fields remain long after they are no longer needed. This is a form of tech debt that comes indirectly as a result of how expensive the system is to configure.
As raised before, Salesforce has achieved its flexibility by rejecting product context and replacing it with a highly configurable platform and an ecosystem of tools that connect into that platform. The problem here is the configuration of that platform is so specialized that most firms seriously using Salesforce will have a Salesforce Administrator. It’s so complicated that they offer formal training and an exam for it!
For most companies, this means that their Salesforce installation will be set up by a consultancy, at great expense, as part of an implementation project. Once the project is over and the consultants leave, you are left to manage the instance on your own. This leads to a family of issues that arise from the fact that users cannot self service changes (due to the complexity) and getting those changes made is expensive.
2. “Salesforce is slow”
Salesforce is old and, despite attempts to modernize it, it’s running on a legacy architecture that cannot keep up with the expectations users have for modern software. Want to collaborate in real time around your data? Not possible. Rich search? Not a chance.
Technology has moved a long way in the last 20 years - we’ve seen the introduction of real time collaboration (through WebSockets, OTs and thereafter CRDT systems), the creation of globally distributed databases that can scale horizontally and the progression of the web platform into a home for first class UI (such as Figma).
Salesforce is a victim of its own success when it comes to technological progression. In particular its backwards compatibility guarantee prevents them from truly modernizing their architecture in a way that could not be represented previously. The rigidity of their architecture creates space for new entrants to the CRM market. A new era CRM that takes advantage of these new technologies at a fundamental level would be able to build a more powerful platform, without a legacy support burden.
3. “Salesforce doesn’t work”
This one is actually the most interesting as it’s normally the result of unintuitive permissions or poorly constructed UI and not a failure of the platform itself. A great example of this is a recent conversation I had with a prospective customer who complained that they had a “Point of Contact” field that everyone on the team could add to but no one could remove a member from. This is a “simple” configuration issue but the deep complexity of Salesforce makes these issues frequent and hard to resolve.
Design is an often under-appreciated aspect of business software that is absolutely critical to making a tool that people can actually understand. Of the many things Salesforce does well, design is not one of them and this can be felt acutely throughout the user experience of the product.
By underinvesting in design, situations like the example above arise constantly, largely as a result of misunderstandings and through no fault of the platform. A well crafted interface could present the user with information about why the field did not work rather than simply failing to remove the entrant.
Why it’s hard to compete with Salesforce
CRM challengers – the newer entrants to the market – typically challenge Salesforce by focusing on resolving these complexity issues by way of removing the flexibility. Typically, they do this by giving users an opinionated platform with a more rigid data model similar to what I described earlier. The theory goes that you can provide a more intuitive user experience, faster time to value and more insightful analytics.
That’s all true, but to extend the financial metaphors, there is a “simplicity tax” with this approach too: users initially have a great sense of relief, but if their business processes become more complicated than the default objects available, they’re stuck.
And now we’ve come back full circle. Salesforce looks appealing again because even though it’s complicated and slow to deploy, you can at least build it how you want. It looks like our friend who predicted that they’ll end up using Salesforce was right all along.
Creating a new path
Business software is changing to be more user focused. We’ve seen Notion overturn knowledge bases, Linear is displacing Jira and Shopify is dominating commerce. Salesforce has built an incredible company and ecosystem. Any product that seeks to displace them will have a lot of challenges to overcome; The data model is extremely important, but far from the only one.
At Attio, we believe that the future of CRM is a flexible tool, built on modern technologies with great UI that allows businesses to take advantage of two decades of innovation without sacrificing the unique needs of their business. We’ve taken our time to get the data model right early on so that we are well placed to help businesses customize their CRM but we still have a lot to build in order to rival the incredible platform that Salesforce have built.
